[Congressional Record Volume 162, Number 64 (Tuesday, April 26, 2016)]
[House]
[Pages H1952-H1954]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FLOOD INSURANCE MARKET PARITY AND MODERNIZATION ACT
Mr. ROSS. Mr. Speaker, I move to suspend the rules and pass the bill
(H.R. 2901) to amend the Flood Disaster Protection Act of 1973 to
require that certain buildings and personal property be covered by
flood insurance, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 2901
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Flood Insurance Market
Parity and Modernization Act''.
SEC. 2. PRIVATE FLOOD INSURANCE.
(a) Mandatory Purchase Requirement.--
(1) Amount and term of coverage.--Section 102 of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4012a) is amended
by striking ``Sec. 102. (a)'' and all that follows through
the end of subsection (a) and inserting the following:
``Sec. 102. (a) Amount and Term of Coverage.--After the
expiration of sixty days following the date of enactment of
this Act, no Federal officer or agency shall approve any
financial assistance for acquisition or construction purposes
for use in any area that has been identified by the
Administrator as an area having special flood hazards and in
which the sale of flood insurance has been made available
under the National Flood Insurance Act of 1968, unless the
building or mobile home and any personal property to which
such financial assistance relates is covered by flood
insurance: Provided, That the amount of flood insurance (1)
in the case of Federal flood insurance, is at least equal to
the development or project cost of the building, mobile home,
or personal property (less estimated land cost), the
outstanding principal balance of the loan, or the maximum
limit of Federal flood insurance coverage made available with
respect to the particular type of property, whichever is
less; or (2) in the case of private flood insurance, is at
least equal to the development or project cost of the
building, mobile home, or personal property (less estimated
land cost), the outstanding principal balance of the loan, or
the maximum limit of Federal flood insurance coverage made
available with respect to the particular type of property,
whichever is less: Provided further, That if the financial
assistance provided is in the form of a loan or an insurance
or guaranty of a loan, the amount of flood insurance required
need not exceed the outstanding principal balance of the loan
and need not be required beyond the term of the loan. The
requirement of maintaining flood insurance shall apply during
the life of the property, regardless of transfer of ownership
of such property.''.
(2) Requirement for mortgage loans.--Subsection (b) of
section 102 of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a(b)) is amended--
(A) by striking the subsection designation and all that
follows through the end of paragraph (5) and inserting the
following:
``(b) Requirement for Mortgage Loans.--
``(1) Regulated lending institutions.--Each Federal entity
for lending regulation (after consultation and coordination
with the Financial Institutions Examination Council
established under the Federal Financial Institutions
Examination Council Act of 1974) shall by regulation direct
regulated lending institutions not to make, increase, extend,
or renew any loan secured by improved real estate or a mobile
home located or to be located in an area that has been
identified by the Administrator as an area having special
flood hazards and in which flood insurance has been made
available under the National Flood Insurance Act of 1968,
unless the building or mobile home and any personal property
securing such loan is covered for the term of the loan by
flood insurance: Provided, That the amount of flood insurance
(A) in the case of Federal flood insurance, is at least equal
to the outstanding principal balance of the loan or the
maximum limit of Federal flood insurance coverage made
available with respect to the particular type of property,
whichever is less; or (B) in the case of private flood
insurance, is at least equal to the outstanding principal
balance of the loan or the maximum limit of Federal flood
insurance coverage made available with respect to the
particular type of property, whichever is less.
``(2) Federal agency lenders.--
``(A) In general.--A Federal agency lender may not make,
increase, extend, or renew any loan secured by improved real
estate or a mobile home located or to be located in an area
that has been identified by the Administrator as an area
having special flood hazards and in which flood insurance has
been made available under the National Flood Insurance Act of
1968, unless the building or mobile home and any personal
property securing such loan is covered for the term of the
loan by flood insurance in accordance with paragraph (1).
Each Federal agency lender may issue any regulations
necessary to carry out this paragraph. Such regulations shall
be consistent with and substantially identical to the
regulations issued under paragraph (1).
``(B) Requirement to accept flood insurance.--Each Federal
agency lender shall accept flood insurance as satisfaction of
the flood insurance coverage requirement under subparagraph
(A) if the flood insurance coverage meets the requirements
for coverage under that subparagraph.
``(3) Government-sponsored enterprises for housing.--The
Federal National Mortgage Association and the Federal Home
Loan Mortgage Corporation shall implement procedures
reasonably designed to ensure that, for any loan that is--
``(A) secured by improved real estate or a mobile home
located in an area that has been identified, at the time of
the origination of the loan or at any time during the term of
the loan, by the Administrator as an area having special
flood hazards and in which flood insurance is available under
the National Flood Insurance Act of 1968, and
``(B) purchased or guaranteed by such entity,
the building or mobile home and any personal property
securing the loan is covered for the term of the loan by
flood insurance in the amount provided in paragraph (1). The
Federal National Mortgage Association and the Federal Home
Loan Mortgage Corporation shall accept flood insurance as
satisfaction of the flood insurance coverage requirement
under paragraph (1) if the flood insurance coverage provided
meets the requirements for coverage under that paragraph and
any requirements established by the Federal National Mortgage
Association or the Federal Home Loan Corporation,
respectively, relating to the financial strength of private
insurance companies from which the Federal National Mortgage
Association or the Federal Home Loan Mortgage Corporation
will accept private flood insurance, provided that such
requirements shall not affect or conflict with any State law,
regulation, or procedure concerning the regulation of the
business of insurance.
``(4) Applicability.--
``(A) Existing coverage.--Except as provided in
subparagraph (B), paragraph (1) shall apply on the date of
enactment of the Riegle Community Development and Regulatory
Improvement Act of 1994.
``(B) New coverage.--Paragraphs (2) and (3) shall apply
only with respect to any loan made, increased, extended, or
renewed after the expiration of the 1-year period beginning
on the date of enactment of the Riegle Community Development
and Regulatory Improvement Act of 1994. Paragraph (1) shall
apply with respect to any loan made, increased, extended, or
renewed by any lender supervised by the Farm Credit
Administration only after the expiration of the period under
this subparagraph.
``(C) Continued effect of regulations.--Notwithstanding any
other provision of this subsection, the regulations to carry
out paragraph (1), as in effect immediately before the date
of enactment of the Riegle Community Development and
Regulatory Improvement Act of 1994, shall continue to apply
until the regulations issued to carry out paragraph (1) as
amended by section 522(a) of such Act take effect.
``(5) Rule of construction.--Except as otherwise specified,
any reference to flood insurance in this section shall be
considered to include Federal flood insurance and private
flood insurance. Nothing in this subsection shall be
construed to supersede or limit the authority of a Federal
entity for lending regulation, the Federal Housing Finance
Agency, a Federal agency lender, the Federal National
Mortgage Association, or the Federal Home Loan Mortgage
Corporation to establish requirements relating to the
financial strength of private insurance companies from which
the entity or agency will accept private flood insurance,
provided that such requirements shall not affect or conflict
with any State law, regulation, or procedure concerning the
regulation of the business of insurance.''; and
(B) by striking paragraph (7) and inserting the following
new paragraph:
``(7) Definitions.--In this section:
``(A) Flood insurance.--The term `flood insurance' means--
``(i) Federal flood insurance; and
``(ii) private flood insurance.
``(B) Federal flood insurance.--the term `Federal flood
insurance' means an insurance policy made available under the
National Flood Insurance Act of 1968 (42 U.S.C. 4001 et
seq.).
[[Page H1953]]
``(C) Private flood insurance.--The term `private flood
insurance' means an insurance policy that--
``(i) is issued by an insurance company that is--
``(I) licensed, admitted, or otherwise approved to engage
in the business of insurance in the State in which the
insured building is located, by the insurance regulator of
that State; or
``(II) eligible as a nonadmitted insurer to provide
insurance in the home State of the insured, in accordance
with sections 521 through 527 of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (15 U.S.C. 8201 through
8206);
``(ii) is issued by an insurance company that is not
otherwise disapproved as a surplus lines insurer by the
insurance regulator of the State in which the property to be
insured is located; and
``(iii) provides flood insurance coverage that complies
with the laws and regulations of that State.
``(D) State.--The term `State' means any State of the
United States, the District of Columbia, the Commonwealth of
Puerto Rico, Guam, the Northern Mariana Islands, the Virgin
Islands, and American Samoa.''.
(b) Effect of Private Flood Insurance Coverage on
Continuous Coverage Requirements.--Section 1308 of the
National Flood Insurance Act of 1968 (42 U.S.C. 4015) is
amended by adding at the end the following:
``(n) Effect of Private Flood Insurance Coverage on
Continuous Coverage Requirements.--For purposes of applying
any statutory, regulatory, or administrative continuous
coverage requirement, including under section 1307(g)(1), the
Administrator shall consider any period during which a
property was continuously covered by private flood insurance
(as defined in section 102(b)(7) of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a(b)(7))) to be a
period of continuous coverage.''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Florida (Mr. Ross) and the gentleman from Massachusetts (Mr. Capuano)
each will control 20 minutes.
The Chair recognizes the gentleman from Florida.
General Leave
Mr. ROSS. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days in which to revise and extend their remarks and
include extraneous material on this bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Florida?
There was no objection.
Mr. ROSS. Mr. Speaker, I yield myself such time as I may consume.
Providing American homeowners and businessowners more affordable
consumer options in the flood insurance marketplace has been one of my
top priorities since I was elected to Congress to represent central
Florida and the Tampa Bay region in our Nation's Capital. Private
competition in this market will lead to greater innovation and more
affordable and comprehensive policies for consumers.
We have seen numerous floods devastating communities across the
country in recent years, most recently in Houston, and last August in
my very own congressional district. Every State and every congressional
district is at risk for flooding. With hurricane season just a few
weeks away from beginning, it is time for Congress to take action to
benefit and better protect consumers.
Unfortunately, regulatory barriers and the bias of regulators
favoring National Flood Insurance Program policies have prevented the
development of a private flood insurance marketplace. This was not the
intention of the Biggert-Waters Act. Rather, it was an unintended
consequence.
With that in mind, I worked with my colleague from across the aisle,
Representative Patrick Murphy, to introduce H.R. 2901, the Flood
Insurance Market Parity and Modernization Act. This bipartisan
legislation will remove the unnecessary regulatory barriers and require
Federal agencies to accept private flood insurance that complies with
the laws and regulations of the State of an insured property.
Under current law, consumers are limited to the coverage options
provided by the NFIP. For example, an NFIP policy only covers up to
$250,000 of damages related to a residential home. In addition, an NFIP
policy does not cover a homeowner's living expenses, such as temporary
housing, if they are displaced as a result of a flood. In the case of a
business, an NFIP policy does not provide coverage for the financial
losses suffered by businesses as a result of a flood.
While the NFIP is limited in what their policies can cover, the
private sector is not. The private sector will provide more incentives
for property owners to invest in mitigation and resiliency. Ultimately,
this increased emphasis on mitigation will benefit homeowners and
taxpayers alike. Studies have shown that, for every $1 of investment in
mitigation, communities see a savings of up to $4 in government-funded
disaster relief.
I want to take a moment and thank Chairman Hensarling and my
subcommittee chair, Blaine Luetkemeyer, for their support of this
legislation and their leadership on this important issue. I also want
to thank the ranking member, Maxine Waters, for working with my staff
and me through this entire process.
This legislation is supported by a number of stakeholders, from the
Realtors, the National Association of Insurance Commissioners, to a
broad coalition of taxpayer advocates, environmental groups, housing
organizations, and mitigation advocates.
On March 2, 2016, the legislation passed out of the House Financial
Services Committee by a vote of 53-0. With such strong bipartisan
support, I am encouraged Congress is taking such an important step on
behalf of consumers not only in Florida, but across the country.
I urge my colleagues on both sides of the aisle to join me in passing
this commonsense, bipartisan legislation that will encourage the
expansion of a well-regulated, more affordable private flood insurance
option for homeowners.
Mr. Speaker, I reserve the balance of my time.
Mr. CAPUANO. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of this bill, H.R. 2901, and I want to
congratulate Mr. Ross and Mr. Murphy for coming up with a piece of
bipartisan legislation.
I want to be clear that the issues surrounding flood insurance are
difficult and complicated, and there are differences of opinion as to
how much of a role private insurance can play. This bill threads that
needle.
This bill says we all agree that there is more role for private
insurance and we should remove any barriers that might be there so that
people can be better served and have better competition. I think this
bill does a pretty good job doing that.
I don't think private insurance is ever going to--I am not sure that
is possible, but it is a different debate--take the place of national
flood insurance. And we are working on that. Mr. Ross has been a great
leader on that, as has Mr. Murphy. I want to thank them and
congratulate them, and I look forward to working with them further to
do more as we move forward.
This particular bill is one good step in the right direction, and I
want to congratulate the two authors and thank them for their
leadership. I look forward to supporting this bill.
Mr. Speaker, I reserve the balance of my time.
Mr. ROSS. Mr. Speaker, I yield such time as he may consume to the
gentleman from California (Mr. Royce).
Mr. ROYCE. Mr. Speaker, I rise today in support of this legislation,
the Flood Insurance Market Parity and Modernization Act.
Since its inception back in 1968, the National Flood Insurance
Program was never intended to cover policies that the private sector
was able and willing to underwrite. In fact, one stated goal for the
program was ``the Federal Government would create an opportunity for
private industry to obtain . . . experience in operating a flood
insurance program . . . and that sometime in the future, the program
could become an all-private program.''
Nearly 50 years have passed and, to no one's surprise, private sector
flood insurance risk modeling and analytics have dramatically improved.
While this House may not be ready to take up complete privatization,
it is time to provide a role for the private market to underwrite
primary flood insurance policies. Passage of this bipartisan bill means
more consumer choice, more market competition, and more product
information. Consumers, for the first time, will be able to shop for a
flood policy that fits their particular needs.
This bill also has the added benefit of decreasing the aggregate
flood insurance exposure to the Federal Government and decreasing the
potential for a future taxpayer-backed bailout, which is very, very
important.
So I commend both gentlemen for their work on this important issue,
and
[[Page H1954]]
I urge my colleagues to support this legislation.
Mr. ROSS. Mr. Speaker, I yield such time as he may consume to the
gentleman from New Mexico (Mr. Pearce), my good friend.
Mr. PEARCE. Mr. Speaker, I thank the gentleman from Florida for
yielding time to me.
You might wonder: Why is someone from New Mexico even speaking about
flood insurance problems? We get about 9 inches of rain a year in my
district. Also, it is the high desert. They call it that because we
begin at around 3,500 feet of elevation and work up from there.
The way the National Flood Insurance Program has worked out in the
past is that people are required, because they happen to be in a flood
plain--and we are not dealing with whether or not they should be in a
flood plain; we are dealing with the fact that they get no competitive
bids--to only get the one government-size bid. And that is never very
functional.
So the most egregious circumstance that exists is one that one of my
constituents mentioned. He said: I live at the top of a 7,000-foot
mountain. The water is down here at about 4,000 feet, 3,000 feet below
me, and I have to buy flood insurance.
Well, the fact that he has to buy flood insurance is egregious
enough, but the fact that he has to live and pay premiums based on the
actuary standards that might exist in Florida is the egregious part.
What it does is keeps houses from selling and people from being able to
buy houses in New Mexico because they have been defined as being in a
flood plain.
{time} 1530
If the market were out there, there would be companies that say:
Wait. That guy is never going to flood. I can charge him a minute
amount and still make money on his policy.
Yet, nothing like that exists. So we find ourselves paying to the
same standards as the people in Florida pay when we get 9 inches of
rain a year.
So I really appreciate the gentleman's attempt to bring some
competition into the workplace. I appreciate Mr. Capuano's support of
the bill, Mr. Murphy's underlying co-sponsorship.
I am here to support heartily H.R. 2901, the Flood Insurance Market
Parity and Modernization Act.
Mr. CAPUANO. Mr. Speaker, you learn something new every day. I am one
of those people. I never expected a guy from New Mexico to be speaking
on the flood insurance bill.
I thank Mr. Pearce for educating me even further.
Mr. Speaker, I yield back the balance of my time.
Mr. ROSS. Mr. Speaker, I want to thank my colleague from
Massachusetts (Mr. Capuano) for his efforts and leadership in this
regard.
Look, this isn't the be-all-to-end-all, but it is the best first step
that we can have as a Congress to make sure that we give our consumers
affordable options in flood insurance.
As we address the reauthorization of the Biggert-Waters Act next
year, this will provide a bridge for bringing the private sector back
into the market to show that they are willing to assume some of this
risk to the benefit of the consumers.
There are quite a few groups out there that support this particular
legislation. To name a few, that includes the Reinsurance Association
of America, National Multifamily Housing Council, National Apartment
Association, National Taxpayers Union, American Insurance Association,
National Association of Realtors, Mortgage Bankers Association, and R
Street.
Mr. Speaker, I urge my colleagues on both sides of the aisle to join
us and overwhelmingly pass this bill.
I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Hill). The question is on the motion
offered by the gentleman from Florida (Mr. Ross) that the House suspend
the rules and pass the bill, H.R. 2901, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. ROSS. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.
____________________